Youth group to Noynoy: Hit two birds with one stone, address the roots of high electricity rates

August 7, 2010

In the face of MERALCO and MRT/LRT fare hikes

“The administration’s refusal to address the rising cost of electricity results in a double-whammy for the average Filipino: in his/her household bill, and the impending MRT-LRT fare hikes” said Anakbayan national vice-chairperson Anton Dulce.

When the Dept. of Transportation and Communications announced a fare hike several weeks ago for the Metro Railway Transit (MRT) and Light Rail Transit (LRT), among the reasons it cited was the rise of operational costs, including the increase in electricity rates. This month, the Manila Electric Co. (Meralco) hiked its rate by 44 centavos to P6.0962 per kilowatt hour (kwh).

The Nat’l Power Corporation also petitioned last June to increase rates by 62.51 to 9.73 per kwh, and 63.61 to 3.99 per kwh, under the Generation Rate Adjustment Mechanism and Incremental Currency Exchange Rate Adjustment.

“There is absolutely no reason for Meralco and Napocor to raise their rates. This is a classic example of capitalist greed. We are outraged that millions of Filipino consumers, as well as the 1.2 million patrons of the LRT and MRT, are being made to pay for such questionable increases” said Dulce.

According to the youth leader, under the Generation Rate Adjustment Mechanism, Meralco can raise its rates by merely submitting records of purchases from independent power producers (IPPs) without any hearings or verification from government bodies such as the Energy Regulatory Commission (ERC).

Contracts between Napocor, Merlaco, and the IPPs have been previously criticized as ‘unfair’ of consumers. According to the think-tank Ibon Foundation, in many such contracts, distributors pay for the amount of electricity generated by the IPPs, instead of the amount actually consumed by the distributors and its customers.

He cited as an example, in 2002, Napocor was billed 27.27 billion kwh. However, only 19.15 billion kwh was delivered to Napocor, and hence to its customers.

Dulce meanwhile challenged President Aquino to intervene in the issue and ‘make the right choice’ by scrapping the controversial Electric Power Industry Reform Act, or EPIRA.

He said “Who are the real ‘bosses’ of Noynoy? Is it the average Filipino who is struggling to make his or her ends meet? Or is it the likes of the Lopezes, Ayalas, and Cojuangcos? He can make the right choice by siding with the people and junk the EPIRA”.

Under the said Act, the government guaranteed that all the electricity generated by IPPs would be paid by the NAPOCOR, resulting in many debts for the government-owned corporation which in turn has been passed on to consumers in the form of rate hikes. Additionally, Meralco and Napocor are allowed to raise their rates unilaterally through the GRAM. ###